Renewables to be second largest source of power by 2015

PARIS – Renewables will become the world's second most significant source of power generation by 2015 and approach coal as the primary source of global electricity by 2035, according to the International Energy Agency (IEA).

In the 2012 edition of the World Energy Outlook, IEA noted that global energy demand will increase by more than one-third by 2035, with China, India and the Middle East accounting for 66 percent of the increase. Energy demand will hardly rise in OECD countries despite a clear shift away from oil, coal -and, in some countries, nuclear- towards natural gas and renewables.

Fossil fuels will remain dominant in the global energy mix, but a steady increase in hydrogen and the rapid expansion of wind and solar power has reinforced the position of renewables as an essential part of the global energy mix, IEA said. Renewables will represent almost one-third of total electricity output by 2035.

The upward trend in renewable energy is supported by falling technology costs, increasing fossil fuel prices and carbon pricing, but most of all by subsidies. Indeed, IEA observed that renewable subsidies amounted to $88 billion in 2011, and they are expected to reach about $240 billion in 2035.

IEA explained that subsidy measures to support new renewable energy projects should be adjusted over time as capacity grows and as the costs of renewable technologies fall, to avoid excessive burdens on governments and consumers.

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